Market unfazed by ‘golden visa’ cancellation

When it was announced that the ‘golden visa’ in Spain was ending there were initial fears for the luxury property market, but there is much optimism according to top real estate firms.

On Tuesday, April 2, the Spanish Council of Ministers officially ended the ‘golden visa’, mirroring actions taken by other European nations.

Despite criticism from various sectors such as business leaders on the Costa del Sol and real estate developers, luxury property agencies believe the Spanish Government’s decision will have negligible effects on their financial forecasts.

Market resilience amid changes

Leading luxury property consultancies like Knight Frank, along with agencies such as Engel & Volkers and VIVA Sotheby’s International Realty, remain optimistic. They predict the prime housing sector will continue to thrive this year.

Despite the government’s decision,  growth predictions remain robust, similar to previous forecasts, a spokesperson for Knight Frank commented.

The Association of Real Estate Consultants (ACI) has voiced concerns, not about financial repercussions, but regarding the broader message the government is sending. Equating the end of these visas with a solution to housing problems is misguided, an ACI representative explained.

Optimism in Spanish luxury real estate

Francois Carriere Pastor, CEO of Coldwell Banker Spain, emphasised that the impact is minimal because the majority of foreign buyers in the Spanish market aren’t pursuing the ‘golden visa’ with their interests lying elsewhere.

Meanwhile, Paloma Perez Bravo, CEO of VIVA Sotheby’s International Realty, argues that the risk of investors moving to other countries is low. Other nations such as Italy and Greece are indicating they will also terminate similar programmes, she added.

European context and future outlook

Portugal, a close competitor, abolished its ‘golden visa’ scheme in February 2023. Since its inception in October 2012, the programme had granted 11,535 residence permits, generating over €6.7 billion in investment.

Daniela Rebouta, sales director at Engel & Volkers Lisboa, noted, that the programme accounted for five per cent of their transactions in the last decade, but its conclusion barely affected them, as they had only completed two golden visa deals in recent years.

In Spain, between 2013 and 2023, 6,200 ‘golden visas’ were granted, involving €3.4 billion invested primarily in property, as reported by Transparency International. This surge in visa applications in 2022 prompted the government to reassess the programme. Transparency International highlights that Chinese investors made up nearly half of these investments, followed by Russia, with 18.7 per cent of the visas granted.

Despite changes and challenges, the outlook for Spain’s luxury real estate remains positive, anchored by a stable and growing market that looks beyond short-term legislative adjustments.